back to article HPE to face lawsuit for allegedly misleading DXC investors

HPE looks set to face a lawsuit claiming it misled investors about employee layoffs relating to the spin-off of its enterprise services business, after a judge declined to dismiss the case. The legal action relates to IT giant HPE shedding the HPE Enterprise Services division in 2017 to merge it with rival technology …

  1. unbender

    "Defendant Lawrie" - an excellent start to the weekend

    1. gryphon

      Prisoner Lawrie would be better but unfortunately this is a civil case. :-(

      Even if they find against him he'll probably only need to sell 1 or 2 of his many properties.

      Can't remember if he had the traditional CEO yacht or not.

  2. Anonymous Coward
    Anonymous Coward

    Dusty old case

    This is the same case reported by El Reg in 2019:

    4 years on and the wheels of justice remain stuck.

    Sounds like DXC was responsible for oiling them ;-)

  3. Pascal Monett Silver badge

    Business as usual then

    "it instead proceeded to lay off many of the company’s most experienced and highly paid employees in order to make cost savings, inflate its apparent financial performance and boost its stock price"

    Sounds like standard operating procedure to me, eh IBM ?

  4. bregister

    "standard operating procedure"

    that is damaging to the long term health of the company, so how long before these companies cease trading ...

    1. sgj100

      but who cares so long as the bonuses are up in the short term?

    2. sanmigueelbeer

      so how long before these companies cease trading

      When the mother company's finances is about to dry up, they go and buy another company with healthier bank balance.

      Rinse & repeat.

      <Trademark & patent pending>

  5. Anonymous Coward
    Anonymous Coward

    This is completely true.

    I went in as a Business Process consultant soon after the DXC spin-off happened. Many of the people leaving were very knowledgeable technical experts, including senior architects and designers. Many of them had committed to projects and were treated like dirt by HPE or and DXC. So what did many do? They didn't keep documentation in shared drives or storage areas that were regularly backed up, so they were able to effectively destroy documentation and in some cases bring projects to a halt.

    The management at HPE and DXC have always been low quality and so didn't spot this happening and didn't put any safeguards in place. Our consultancy were being paid more than I was getting, which was £1000 per day plus whatever the consultancy were charging on top. It was the most chaotic place I have ever had the misfortune to work. HPE and DXC were one and the same, with no separate office areas. It's a tax con.

    Instead of buying hardware and software and providing a service, they would start charging clients for the service when no service existed, and use this income to then begin to buy hardware and software, contractors, whatever else was required. I was appalled. They had a lot of graduates walking about getting paid more than many of the techies, but they were fresh out of university and were in the deep end of a fake merger and spinoff company called DXC. To add insult to injury they made all the graduates redundant before the 3 year grad program ended, ending them at 19 months. ensuring they weren't entitled to any redundancy payments.

    If you are running a company and thinking of allowing DXC or HPE to tender for your project, are you mad or just ignorant of how they operate? They are a stain on the IT world and everybody with any knowledge of their operations knows it, including their own current and former management.

  6. MO'B

    This came as a surprise to investors?

    I was an Enterprise Services employee during the time of the merger, after which I was a DXC employee until I retired. I heard that, as one manager put it, "we'll save $1 billion by eliminating duplicate positions. You don't need to worry about those layoffs, because you probably don't know them anyway."

    That seemed, at best, wildly optimistic at the time after some back of the envelope calculations. In order to save $1 billion, you need to eliminate about 10,000 positions (assuming on average $100,000 per position). Where would you find 10,000 duplicate positions?

    HR? Finance? Accounting? You can save a few positions but it takes a certain number of people to handle the workload, and the total workload wasn't going to change. It takes a certain number of people to manage those people, and that doesn't change. You lose a few at the top, but nowhere near enough to make those numbers.

    Facilities? Where possible you could merge facilities and reduce staff somewhat. Of course, merging facilities means moving people and equipment, so is a cost short term.

    Sales? Sales and pre-sales teams that were competing for the same markets could certainly be merged and trimmed.

    Account teams? The point was made that for the most part CSC and HPE-ES had non-overlapping customer lists, so the potential here was small.

    IT? IT would be busy for years merging systems.

    So were there really 10,000 duplicate positions, particularly after the staff reductions that took place in the years leading up to the merger?

  7. Anonymous Coward
    Anonymous Coward

    No really?

    I don't understand how anyone can pretend to be surprised by such behaviour, which is standard practice, let alone sue they were misled.

    The investors are admitting they are idiots and gullible and identifying themselves as rubes to ripped off again.

    HPE + CSC ->DXC was the very worst of US corporate behaviour made flesh, all the worst actions of HPE + CSC (both of which were sketchy) amplified x100.

    The lies the companies told employees were scandalous, and many of the poor practices continue to this day.

    How DXC expect to recruit the many staff they need in the UK is a mystery to me, unless of course DXC is recruiting from the investors

  8. TheBorg

    What goes around comes around ..

    Well ... this couldn't happen to a nicer company or group of execs who have systematically creamed all value out of what could have been a big player in IT services. I was lucky enough to be paid to leave just before HPE ES merged with CSC to form DXC. The HPE ES account team (for Deutsche Bank) were a bunch of cowboys who treated the staff like something on their shoe, it was clear (and I saw the plan) to ditch us all for offshore at the earliest opportunity. Deutsche Bank senior management knew that but they didn't care because we had all been transferred to HPE ES.

    I hope the case goes in the investors favour - its time some execs face the reality of their lies and deceit.

    1. Anonymous Coward
      Anonymous Coward

      Re: What goes around comes around ..

      Did HPE, DXC, investors do any due diligence on the deal ??

      I hope there has not been any hardware sales reported in the software/licensing revenue either ;-)

  9. Anonymous Coward
    Anonymous Coward

    All said and done....

    Our governments let it happen. This is just another attempt to shut the door when the horse has bolted

    We're the biggest mugs, we keep paying people in government and law and they just keep failing us,

    1. Anonymous Coward
      Anonymous Coward

      TBH looking at the Speaker debacle/shit-show in the House of Representatives… it’s surprising anything gets done.

      Next up will be the faux debt ceiling US Govt shutdown squabbling, after Janet Yellen called it the other day that will break coming Thursday….

      …Don’t fuck with people’s money!!!

  10. Anonymous Coward
    Anonymous Coward

    I was a "higly paid" HPE resource laid off during the "workforce optimization"

    I was very highly paid contractor to HPE assigned to the HPE Datacenter Transformation program and was assigned to several VERY high visibility projects. I was unceremoniously shitcanned 2 days before thanksgiving 2015 with no notice and no severence. I was told all of my projects ran well past expected delivery, long by more than 9 months.

  11. Eric Kimminau TREG

    The REAL question is...

    What about DXC and their mPhasis "employees" in the coming sale/purchase/merger? Hmmmmm.....

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Other stories you might like